If you are adding fields to a component, you will need to add that field in the component's database and you will need to add that field within each layout file that creates or edits records for this database.
As a result of your changes to the XML file, the screens that display these fields will reflect the changes (size, required, filters, etc.)
This plugin works on a any component that uses JForm with the XML field declarations. All core components within Joomla use the XML files for their fields. Some third-party components do not, and in those cases this plugin will have no effect. We recommend you choose components that leverage Joomla's JForms and XML field declarations.